Capital Chaos

  The Point (Chicago, ILL) which seems to be living out its dream from starting out on the back of a napkin a little over a year ago, pulled some coin together with the help of New Enterprise Associates.  The company had originally raised $2.5M in an angel round back in 2007 and this new round should give them some cushion in building and launching their idea of social campaigns (a fundraiser, social contract, frustrated customer).  The basic premise of people coming together based on a similar frustration or cause and then using that mass of people to influence an action isn’t new but takes a new shape with The Point.

 In an age of information sharing continually growing, the purpose of The Point seems to be connecting people with like interests/needs/frustrations and then letting them band togeter to attempt to affect an outcome different than when it was just “them against the world”.

While it’s only in Alpha now, I really like the idea that Andrew Mason thought up on a napkin.   If nothing else, the entrepreneurial spirit of this team should be enough to get them going - hey, they raised $6.3M and are still in Alpha!  Good confidence builder!

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 New Enterprise Associates (Menlo Park, CA) is a $8.5B VC firm that was started in 1978 and has invested in more than 550

companies!  No matter the stage your company is in, these guys are always interested in taking great ideas and translating them into significant value. 

For the firm, it’s all about the relationships you build between you and them.  At the end of the day, they recognize that your venture partner ends up being like a family member than you actually had a choice to pick.  There are no deep analytics here, just pure chemistry between what they know has worked in the past and what they believe will work in the future and coupling that with the people who are seeking their assistance. 

Even though they are based in Menlo Park (with another US office in Chevy Chase, MD of all places), their investment strategy is not limited to some geographic area.

The main areas of focus for NEA are, Information Technology, Healthcare and Energy Technology (Think Green).  Since they do have some diverse holdings, they created something called Venture Growth Equity investing.  NEA defines their Venture Growth Equity as “investments which entail the same risk profile and return characteristics of traditional venture capital, but require significantly more equity dollars. In order to facilitate growth, these companies are in need of a unique financial partner possessing significant venture growth experience and substantial capital capabilities.”

If you are going to pitch these guys, be prepared since the bar is pretty high.  When exploring the possibility of selecting NEA, they remind you to ask yourself the following questions:

Uniqueness.  Is your product, service, or process truly unique? Will it improve the way people work, live or play?

Leadership.  NEA focuses its investments on well-managed companies. We’re interested in your ability to attract the best and brightest talent, your appreciation for finance, your willingness to delegate, your integrity, your ability to make difficult decisions and your strategic orientation toward your chosen markets.

Receptivity. NEA Partners have substantial experience with new and emerging businesses. We expect to make valuable contributions to your company, whether as directors or on an informal basis.  Are you willing and able to accept our business counsel?

Need.  Does your product, process or service satisfy a true need?

Value.  Does your product, process or service possess real value?

Preeminence.  Do you, or will you, have a dominant market position?

Potential. Does your market have the potential for substantial expansion? Will your growth result from increased demand rather than gains in market share?

Since these guys have multiple offices you want to find the best person who will understand your business to pitch to.  IIn Maryland, Harry Weller (hweller@nea.com) gets some great marks for being thoughful and on top of his game.  Harry’s main focus is in IT.  Also, another standout is Peter Barris (pbarris@nea.com) also in Maryland and focuses on IT.